Oman’s government released a 2019 state budget on Tuesday that slows spending growth but may not cut a big deficit that has caused international rating agencies to downgrade its debt to junk status. Spending this year is projected at OMR12.9bn (USD33.5bn), up from OMR12.5bn in the original budget for 2018. That implies spending growth of about 3%, compared to nearly 7% in the 2018 budget. Revenues are estimated at OMR10.1bn, assuming an average oil price of USD58 per barrel this year; that would leave a 2019 budget deficit of OMR2.8bn, or 9% of GDP. The government said it would finance 86% of this year’s deficit through local and foreign borrowing. It has also been covering its deficit by drawing down financial reserves. Omani authorities are seeking to reduce the pressure by boosting non-oil revenues; a 5 percent value-added tax may be introduced as soon as late this year. But the tax has been delayed by technical challenges and concern about damage to growth and investment, and oil prices will in any case remain the key factor for revenues.